TMI Blog2022 (11) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority to assess this first assessee Shri Shyamjibhai Shivjibhai Shah only to the extent of 1/3rd amount in the impugned sum of Rs.2,12,00,000/- followed by the remaining 1/3rd each in the hands of Shri Ramesh Shamjibhai Shah and Shri Ashish Shamjibhai Shah (sons). - ITA No.2112/PUN/2017 & 2135/PUN/2017 - - - Dated:- 23-9-2022 - SHRI S.S.GODARA, JUDICIAL MEMBER AND DR.DIPAK P.RIPOTE, ACCOUNTANT MEMBER Assessee by Shri M.K. Kulkarni Revenue by Shri Ramnath P. Murkunde DR ORDER Per S.S.Godara, JM: These twin assessees , as many appeals, both for AY.2007-08, arise against the Commissioner of Income Tax (Appeals)-4, Pune s separate orders dated 20.02.2017 passed in Case Nos.PN/CIT(A)-4/ITO, Ward-6(1), Pune/72/2015-16/119 and PN/CIT(A)-4/ITO, Ward- 5(3),Pune/71/2015-16/205, respectively, in proceedings u/s.143(3) of the Income Tax Act, 1961, in short the Act . Heard both assessees as well as the department. Case files perused. 2. Mr. Kulkarni first of all took us to the former assessee Shri Shyamjibhai Shivjibhai Shah s appeal ITA No.2112/PUN/2017 raising the following substantive grounds : 1. On the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition issue on merits involving a sum of Rs.70,66,666/- (substantive basis) and Rs.1,41,33,334/- (protective basis); totalling to Rs.2,12,00,000/- as unexplained investment u/s.69 of the Act added in both the lower proceedings. It emerges from a perusal of the Assessing Officer s assessment order dated 27-03-2015 that he had received a complaint along with authentic documents through the DIT (Inv.), Pune about the taxpayer having acquired two shops after paying the foregoing sum in cash. The contents of the said document(s) form part of page 3 of the assessment order. The Assessing Officer thereafter recorded the assessee s as well as his son s statements wherein they simply denied their respective signatures despite the fact that the loose sheets received from Investigation Wing had duly indicated them to have acquired the two shops. He thus proceeded to treat this entire sum in assessee s hands on protective and substantive basis (supra) in above terms. 5. The CIT(A) has affirmed the assessment findings as follows : 5.3 DECISION : I have perused the assessment order and the submission made by the appellant as above carefully. I find that the AO had reopened the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that if the Income Tax Department was determined to make addition, then only 1/3rd of the gross amount of Rs.2,12,00,000/- could be added back in his name because the agreement was signed by him and his two sons viz. Ramesh Shah and Shri Ashishbhai Shah. Accordingly, the AO made addition as above. 5.3.1 The appellant, on the other hand, contended that it was clear from the assessment order that the notice u/s. 148 was issued on 28/03/2014 and was served on 28/03/2014. It was contended that since the notice was issued after 4 years, the approval of the additional CIT Range-5, Pune was obtained by the AO vide his letter dated 26/03/2014. The appellant contended that the provisions of section 151 titled sanction for issue of notice were amended with retrospective effect from 1/06/2013 by Finance (No.2) Act, 2014. After quoting the said provisions, the appellant contended that the sanction was said to be given u/s. 151(1) was Mechanical . The appellant further referring to para 4 of the assessment order contended that it was not understood who was the AO who had recorded the reason for reopening u/s. 148(2) of the Act. The appellant contended that he had furnished his ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, Range-5, Pune in mechanical manners, which were not in accordance with the Act after the amendment of section 151 with retrospective effect from 01/06/2013 by the Finance (N0.2) Act, 2014. The appellant also had cited two decisions in his submission in this context contending that if the sanctioned is given by the Addl. CIT in a mechanical manner, the proceedings would be invalid. As already stated above, after duly stating the facts and finding out the misrepresentation and discrepancies in the agreement by and between the Shah family in the coded figures written in the said agreement, the AO as 'well as the DCIT (Inv) could decipher the coded entries that there were a transactions by and between the Shah family and the Mehta family represented for the Maharashtra Girls Education Society a Trust, there was a concealment of income on the on the part of the appellant and his two 'sons worth Rs.2,12,00,000/-. After recoding such reasons, the AO sought for the approval of the Addl. CIT who was the prescribed authority according sanctioned. The Addl.CIT after going through the said facts had approved for issuing notice u/s. 148 of the Act. Such an action of the Addl. CIT c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the assessee and his two sons namely Shri Ramesh and Ashish Shamjibhai Shah as not only having acquired the two shops but also they put on their signatures on the agreement concerned. We, accordingly affirm the impugned addition in assessee s hands as his unexplained investment u/s.69 in principle. 7. Next comes equally important aspect of quantification of the impugned addition. The Revenue could hardly rebut that it is not this former assessee Shri Shyamjibhai Shivjibhai Shah only who has acquired the twin shops in his name but also his two sons namely Shri Ramesh and Ashish Shamjibhai Shah (supra). We thus see no reason to make the entire addition in this former assessee s hands. We are next informed that the department has already added 1/3rd each of the foregoing sum in his two sons cases as well. And that Shri Ramesh Shamjibhai Shah is already in appeal ITA No.2135/PUN/2017 herein. Faced with this situation, we direct the learned assessing authority to assess this first assessee Shri Shyamjibhai Shivjibhai Shah only to the extent of 1/3rd amount in the impugned sum of Rs.2,12,00,000/- followed by the remaining 1/3rd each in the hands of Shri Ramesh Shamjibhai Shah and S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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